What it is:
Although assessed value is a term used in conversations about property taxes, it is also an important factor in municipal bond issues. Because many municipalities receive a large portion of their local revenue from property taxes, the ratio of assessed value to net debt is an indicator of the quality of the bond issue.
How it works (Example):
Let's assume you own a house. The property tax assessor in your municipality will likely assign a value to the house and calculate your property taxes based on that assessed value.